"This will help maintain mining and stabilize the number of
coins in circulation (considering lost wallets and various other
ways coins may be destroyed) at 100 billion," Palmer
wrote.

This is close to how a normal
fiat currency like the U.S. dollar works. Like the greenback,
Dogecoin will now better be able to respond to increasing demand,
as well as potential damages like those outlined by
Palmer. It also
gives incentives for miners to keep operating, thus helping keep
the network more secure — as in Bitcoin, "mining" Dogecoin also
serves to confirm the transactions taking place on the digital
currency's master exchange ledger.

These all happen to be problems
Bitcoin currently faces. Bitcoin has a early adoption and
miner-arms-race regime. Those who got in earliest, or can mine
the most, enjoy lopsided control over the Bitcoin market.
We've discussed this elsewhere. The result is that they are
crossing their fingers that Bitcoin adoption will become
widespread, thus helping drive up value. It's hard to tell what's
driving what, but the price has settled at $800for a
couple months now. That's a
lot to pay for a single Bitcoin for someone just entering the
market.

"A fixed
supply that can't respond to demand is a bad thing.
Money, like every commodity, works best when the supply
can adjust efficiently to the demand. (The people who
don't like this are primarily people who want to make other
people act against their own interests just so that they
personally can make a large profit by not doing anything but
holding money.)"

That
description would apply to Bitcoin miners that are in ovedrive to
acquire enough Bitcoin as possible. They are not generating any
more demand — they are merely banking that demand will come in
time, and thus increase the value of their holdings.

Others
have tried to do this with Dogecoin. "I'm strictly in it for the money,"
wrote GitHub user MadCold.
"I bought in to massive amounts of DogeCoin when the price was
cheap, expecting it to rise. So far it looks like the value of
the currency is tanking. Nearly 10c per 1K over the past few
hours. I still demand [Palmer] answer for what he's doing to ruin
the DogeCoin currency."

Secondly,
Bitcoin is already approaching the point where mega-miners will
have to begin charging fees to continue mining. As we discussed
above, mining helps keep the network secure, so the cost of
security is going to increase. By creating a steady rate of
inflation, Dogecoin can keep security cheap.

"The ones
making the most noise in the pro-deflation camp aren't the ones
we want to serve, if we're to become the Internet's currency,
we'll have to reach the mainstream users which don't care about
hoarding massive amounts of Ɖ for profit, the max 5% loss of
value per year caused by inflation in the worst case or broken
promises on a Bitcointalk thread. They care about having a
currency where micropayments are properly implemented (without
the insane fees and minimums PayPal & friends want) and
tipping is effortless."